Peter Cochrane's Blog: All mobiles will be free in five years

Paid-for services, laptops and netbooks will sweeten the deal

Written in San Francisco coffee shop off Market Street and dispatched to via a free wi-fi service.

Today there are more than four billion operational mobile phones in the world, and by year-end this number is expected to pass five billion.

In the West just about everyone who wants a mobile has one. Thus sales have slowed, and stores and operators alike are looking at the 'replacement only' market as a daunting prospect.

In short: the good times are over and times are going to get really hard.

What are they to do?

Well, I was just in a store offering a bewildering array of laptops and netbooks for free. Of course they are not truly gratis - they are components in a package which includes services and marketing opportunities.

How did this happen? Well the market topped out, the cost of handsets fell, and operators realised the money was in charging for services. So the industry has wisely started to change shape and go with the flow.

As our mobile phones cost considerably less than laptops and netbooks, and the mobile industry is relatively richer than the PC business, with more mobiles connecting to the internet than PCs, the outcome seems obvious.

My prediction is that all mobile phones will be free at the counter within five years. You will have to lock into a contract of course but I reckon the smart money will be on a package that includes a laptop/netbook and a mobile phone. And even better, I predict that there will be family and company deals to be had too.

The package for individuals and small companies will include instant connection into the cloud, a VoIP package, and a vast array of apps and services. The only question is: who is going to be first to offer this?

In the UK and the US supermarkets are selling mobiles in the $15 to $20 range. So I reckon the clock is ticking. An offering which includes hardware plus bundled music, video, navigation, location-based, security and support services will be irresistible. Just like pay-as-you-go mobile before, it will be transformative!